GULF announces 3Q21 core profit at THB 2,293 million, an increase of 73% YoY 

Ms. Yupapin Wangviwat, Executive Director and Chief Financial Officer of Gulf Energy Development Plc. (GULF), revealed that for Q3’21, GULF recorded core profit of THB 2,293 million, an increase of THB 968 million or 73% year-on-year (YoY). The growth mainly came from the dividend income of THB 1,666 million from Intouch Holdings Public Company Limited (INTUCH) and profit from Gulf SRC (GSRC), an IPP with total installed power generation capacity of 2,650 MW, following the commercial operation of its first unit (installed power generation capacity of 662.5 MW) on March 31, 2021. The rise in core profit also came from the higher volume of electricity sold by 12 SPPs under GMP group to the Electricity Generating Authority of Thailand (EGAT) and industrial customers, especially from the jewelry, electronic components, and packaging sectors. The average load factor of industrial customers for the 12 SPPs was 59% compared to 57% last year. Additionally, the 7 SPPs under GJP group also recorded higher volume of electricity sold to industrial customers, especially from the textile and electronic components sector, with the average load factor of 61% compared to 60% last year. However, Gulf Nong Saeng (GNS), one of the IPPs under GJP group, underwent maintenance for 10 days, resulting in a decline in GJP’s core profit YoY.

In Q3’21, GULF recorded net profit attributable to the parent company, which includes the impact from foreign exchange rate, of THB 1,588 million, an increase of 71% YoY compared to THB 970 million in Q3’20. This resulted from the unrealized loss of THB 767 million due to the depreciation of the THB against USD from 32.22 THB/USD at the end of Q2’21 to 34.09 THB/USD at the end of Q3’21.

image2 14Total revenue for Q3’21 was recorded at THB 13,780 million, an increase of THB 5,035 million or 58% YoY. The increase is mainly from the revenues from GSRC Unit 1’s commercial operation in Q1’21, Borkum Riffgrund 2 offshore wind power project (BKR2) in Germany, which was recognized for the first time in Q4’20, higher electricity and steam sales to industrial customers of the 12 SPPs and the dividend income from INTUCH. Meanwhile, electricity sales from Gulf Tay Ninh 1 (GTN1) and Gulf Tay Ninh 2 (GTN2) solar farms in Vietnam dropped slightly due to the temporary curtailment following the spread of COVID-19 pandemic, causing nationwide lockdown and affecting Vietnam’s electricity demand.

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Gross profit margin for this quarter was 24.6%, a decrease from 25.9% in Q3’20 due to the increase in natural gas costs by 14%, from 235.22 THB/MMBTU to 268.61 THB/MMBTU while the average Ft rate decreased by 29% from Q3’20, from -0.1188 THB/kWh to -0.1532 THB/kWh. However, since GULF sells 90% of its electricity to EGAT, the cost of natural gas is passed through to EGAT. Industrial customers account for only 10% of GULF’s electricity sales; therefore, there was limited impact from the spike in natural gas prices. GULF’s EBITDA margin was 44% this quarter compared to 40% in Q3’20 mainly due to the dividend income from INTUCH.

As of September 30, 2021, GULF had net interest-bearing debt to equity ratio of 2.34 times, an increase from 1.75 times at the end of Q2’21. This was mainly due to loans from financial institutions of approximately THB 48,612 million for the acquisition of INTUCH shares from the tender offer. However, the net interest-bearing debt to equity ratio is expected to decrease to approximately 2.00 times in Q4’21 following the change in accounting treatment of GULF’s investment in INTUCH to equity method, resulting in an increase in shareholders’ equity from the gain on adjustment of average cost of INTUCH to fair value as of October 1, 2021 (effective date for applying equity method).

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Ms. Yupapin added that in Q3’21, GULF has issued debentures totaling THB 30,000 million to institutional investors and high-net-worth individuals. The debentures have an average maturity of 6 years at an average interest rate of 2.5%. The proceeds have been used for partial loan repayment for the acquisition of INTUCH shares and future investments. Moreover, on September 29, 2021, BGSR 6 and BGSR 81, a joint venture company of GULF, BTS Group Holding Public Company Limited (BTS), Sino-Thai Engineering and Construction Public Company Limited (STEC) and RATCH Group Public Company Limited (RATCH), signed the public private partnership (PPP) contract with the Department of Highways for a period of 30 years to operate the Bang Pa-In – Nakhon Ratchasima M6 Intercity Motorway project, with a distance of 196 kilometers, and the Bang Yai – Kanchanaburi M81 Intercity Motorway project, with a distance of 96 kilometers. The project is expected to start the civil works in December 2021 and scheduled to commence commercial operation in 2024.


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In addition, GULF has always recognized the importance of sustainable business development and operations and has developed business strategies in accordance with the global shift towards clean energy in a move to support the company’s business expansion in the future. As such, GULF has recently restructured the Group’s business by establishing Gulf Renewable Energy Company Limited, a subsidiary in which GULF holds 100% equity stake, to operate businesses related to renewable energy such as wind energy, solar farm, solar rooftop, biomass and hydropower, including feasibility studies for renewable projects in Thailand and overseas. GULF has strictly adhered to the No Coal Policy and set a target to increase the proportion of installed power generation capacity from renewable energy to more than 30% of the company’s total gross installed power capacity within 2030. image6 2

Ms. Yupapin stated that GULF continues to make key progress in Q4’21. On October 1, 2021, the second unit of GSRC power plant, with installed power generation capacity of 662.5 MW, commenced commercial operation as planned. The Laem Chabang Port Phase 3, Terminal F project, a joint development between GULF, PTT Tank Terminal Company Limited and CHEC OVERSEA INFRASTRUCTURE HOLDING PTE. LTD. to operate a deep-sea container port, is expected to sign the PPP contract with the Port Authority of Thailand within November this year. Finally, the 912-MW Pak Beng and the 770-MW Pak Lay hydropower projects in Laos are expected to sign the Tariff MOU with EGAT by the end of this year.